Tory tax review seeks 'simpler, flatter' system

A Conservative party review of the tax system was launched today by the shadow chancellor, George Osborne, to look into "simpler, fairer and flatter taxes".

Sir Christopher Gent, chairman of the pharmaceutical firm GlaxoSmithKline, is among business figures joining the Tories' "Tax Reform Commission".

Labour say that any move toward flat, or uniform, tax rates would mean a vast reduction in spending on public services.

Sir Christopher is thought to favour the introduction of flat taxes, being taken up by some eastern European economies.

The appointment of Lord Forsyth, a former Tory cabinet minister from the right of the party, as a commissioner suggests the body could warm to the idea.

The shadow chancellor says flat taxes must be properly examined but that his review will go further than that.

"Under Gordon Brown, 200 years of tax law has doubled in just eight years," he said. "That is why I believe we need this Tax Reform Commission.

"Reforming a mature and complex tax system like ours will be no easy task.

"But as international competition accelerates, we must strive for a better tax regime, which boosts competitiveness for the country and opportunity for all.

"If Britain is to compete in the next century, we need the will not just for lower taxes but for simpler, fairer and flatter taxes too.

"Only then can we bring long-term sustainable jobs and investment to this country."

The new commission will report to the Tories next summer, allowing the party to pick proposals that could form central planks of their manifesto at the next election.

The commission is similar to the party's review of government spending carried out by David James ahead of the last election.

The businessman's recommendations were the basis for proposed efficiency savings in the party's manifesto in May.

While leader Michael Howard was bound by those findings, the tax reform commission may be used to float more controversial ideas before adopting them.

Mr Osborne is recruiting 10 people to the body. They also include David Frost, of the British Chambers of Commerce; Graeme Leach, of the Institute of Directors; Len Beighton, of the Low Incomes Tax Reform Group; Jill Kirby, of the Centre for Policy Studies; Stephen Machin, of KPMG LLP; and Peter Reith, of the European Bank for Reconstruction and Development.